A Helpful Guide to Disability Insurance - What Does It All Do for You?

By taking out disability insurance your income is covered in the unfortunate event of disability due to injury or illness.

The majority of group plans break down disability insurance into short-term and long-term disability cover. Disability from the first day lasting up to 120 days, is usually covered by a short-term scheme Disability continuing from 120 days up to the age of 65 is covered in the long-term disability insurance.

These policies can be purchased individually but normally they work together on the same policy, so as the short-term part of the policy comes to an end the long-term starts, which is good news as there is no loss of income. You could also be eligible for government benefit plans for example Workers Compensation or Employment Insurance.

Individual plans are slightly different to group plans, they do not separate short or long term disability cover. A waiver period, usually between 30 and 180 days, can be figured in to the plan. The elimination period is the period of time the individual must wait before being paid his or her disability benefit. An individual plan in addition allows the insurer to pick how long the benefit will be paid out on the plan they have picked. Normally these periods are anything from 2 years to the age of 65, it is the individuals choice.

If you want to buy disability insurance, it's inevitable to consider that long-term disability claims are going to be the ones that have the greatest impact on the insured's financial situation. If the insured is off work for 30 or 60 days, chances are he or she will be able to cope financially. Although, If insured is off work due to an injury or illness for an unspecified period of time the financial impact can be devastating.